Is $10 billion a bargain for Africa?
November 13, 2009
The $10 billion was only one out of eight new measures China announced but has attracted the most attention. (The others include partnerships on climate change, science and technology, education, and opening Chinese market to African products, etc.) This attention is not surprising. Most of the financing is expected to go to infrastructure. Chinese companies are already building roads, ports, railways and oil pipelines all over Africa and this will only increase while questions about the Chinese role intensify. China is being accused of working with African regimes regardless of their human rights records, of neglecting environmental and social concerns, and of a lack of transparency.
The Chinese are aware of the criticism. “The rapidly growing relations and cooperation between China and Africa have attracted the world's attention in recent years”, Chinese Premier Chen himself admitted this past weekend. He claimed that Chinese "…assistance towards Africa is based on improving people's lives and protecting the environment". Yet, not everybody believes him and many feel China is simply looking for cheap access to Africa’s natural resources.
African leaders, though, support Chinese increasing role on their continent, saying Africa was “a victim of European double standards”. "The standards that Europe has been imposing on Africa are not the same standards Europe imposes on Eastern Europe," the Kenyan Foreign Minister Moses Wetangula is quoted as saying in response to why African countries are welcoming the money from China. Money that is used for much needed investments to beef up the economy. "I would prefer the Western world to invest in Africa rather than handing out development aid," Rwandan President Kagame recently said, echoing the theme of Dambisa Moyo’s recent bestseller Dead Aid.
So what’s wrong with this increased Chinese role? Why wouldn’t we all support another $10 billion in much needed infrastructure investments? The problem is we simply don’t know how sustainable this money is invested. As noted by the World Bank, what's disturbing about the Chinese investments is the complete lack of transparency. No studies, no environmental reports, no evaluations are ever made public. So it’s impossible to say whether the choice Africa has in going with Chinese investments is the right choice. China urgently needs to improve the transparency of its partnership with Africa, engage in dialogue with NGOs and other local stakeholders, and work on making its investments sustainable. It’s ironic China is still lending over $2 billion in loans from the World Bank yearly, placing “emphasis on growth that is balanced with social and environmental concerns”, while the Chinese investments in Africa are not addressing these concerns.
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